World Bank: 88 percent of Kosovo's private sector has been hit during pandemic time

In the Western Balkan Labour Markets report under the COVID-19 crisis, published by the World Bank, notes that restrictions on movement and keeping social distance have violated labour-wing supply and demand, transportation and travel in an unprecedented way.

The report recalls that whole sectors of national economies have been closed: hotel-respectants, non-needed trade, tourism, transport and a large share of the production, and despite state support packages, businesses of all economies are suffering losses, what endangers their operations and payment capacity. Most affected by the BB are small and medium-sized firms, as well as informal businesses.

BB points out that at the end of the year, Kosovo had the largest increase in the number of employed persons -- 6.7 percent at the annual rate.

The WB says that in the last two years in Kosovo and Montenegro, wages have increased by over 2 percent. Although Kosovo is the country with the greatest increase in employment, there is still a large amount of untapped workforce.

In 2019 the unemployment rate dropped to 13.4 percent, 2.3 percentage points lower than in 2018, where in Kosovo and North Macedonia dropped by 3.5 percentage points. But when the crisis began, almost a second of the working age population in the region was inactive. In Kosovo, inaction had even increased before the crisis; 70 percent of Kosovars were found without jobs. Although Kosovo is still far behind, the first successes have increased the female turnout rate to over 22 percent of working age women.

While mentioning all Western Balkan countries, the report says that commercial companies have moved rapidly to protective measures: have changed working schedules, made temporary work hours cuts, forced workers to obtain annual permits, pay permits, and even job cuts to cope with the drop in operations or even forced closure.

As for Kosovo, The WB cites firms that have registered a much higher number of employees as newly unemployed, indicating that the support for employment given to working in the formal sector within the government's fiscal package for the state of emergency has contributed to the formalisation of workers.

A Kosovo business association found that 84 percent of the firms surveyed were either completely closed or were working at reduced capacity or reduced working hours, and about 29 percent had reduced the number of employees.

In Kosovo, the gender gap that existed earlier, according to the BB, shows that only 13 percent of the affected employees will be female.

It will be important to ensure that gender inequalities are not expanded over and after the pandemic, and that the 2 achievements of human capital, economic empowerment and voice and strength of women, accumulated so hard over the last decades, do not come back. Three-quarters of the affected employees are 30-64-year-old group. It is not surprising that the biggest blow was taken by private sector entrepreneurs (88 percent). In Kosovo alone, there will be more temporary employees who will lose their jobs compared to those who are in defined working relations, but this is due to the pre-crisis working market structure. A second of the affected employees will be in small societies (up to 10 employees)

Immediate policy responses must provide relief measures for employees and companies to protect their livelihoods and businesses with economic stability, especially in the worst hit sectors, thereby laying the groundwork for conditions for an immediate and rich recovery with tão jobs. Public sources must first be used to provide temporary and targeted relief to the more seriously affected sectors. The experience of previous economic slowdowns has shown that wage subsidies can help preserve jobs. The negative estimates of wage subsidies usually involve programs targeting people in unfavourable positions or promoting the creation of new economic time jobs <x0-> normal”. But to reach the right speed, subsidies may take time. Effective communication, social dialogue and clear government commitments are critical for limiting job losses during the crisis.

Although the effects of the crisis are still under way, some shy signs of relief can now be seen in some countries. It is good for the authorities not to draw attention to such long - term challenges as acute lack of labor power and poor productivity. It is worth seeing opportunities to transfer business operations to closer countries, contracting third services and digitisation. Over the long term, Western Balkan countries must also increase skills investments and enhance skills development opportunities. To reduce the risk of automation and improve the quality of jobs, the region needs to increase investments in basic skills and modern skills “of the new economy”, such as ICT skills, the ability to solve problems, creativity, communication and human skills that will enable current and future employees to adapt to labour markets that are undergoing rapid changes.